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Stelo Labs, a web3 security company, raised $6 million in a seed round led by Andreessen Horowitz, the company exclusively told TechCrunch.

The company was co-founded by Ben Scharfstein, CEO, and Aman Dhesi, CTO. Both have backgrounds in product management — Scharfstein worked at Google, and Dhesi held roles at Facebook, DoorDash and Square.

Stelo Labs’ goal is to make web3 “safe and understandable for everyone,” Scharfstein said. “When we think of what web3 can be and enable, it’ll be cut off at the knees if things aren’t safe.”

While there are a number of web3 security companies out there, Stelo Labs focuses on helping prevent malicious transactions, phishing and social engineering for Ethereum-based users, Dhesi said. “The surface area of these attacks have been growing as people innovate and create new schemes — there’s more ways for people to phish you.”

The startup launched its Stelo extension in September to help users protect their wallets from scams and phishing attacks. The open source extension acts like a firewall between any transaction and a user’s wallet, but never has access to one’s private seed phrase or keys.

“We realized the security problems in web3 are product problems, interface problems as well as data problems and security problems,” Dhesi said. “But in web3, the responsibility often falls on the user.

There’s no intermediaries that help there,” Dhesi said. “It really comes down to building experiences and products for users so that they can be empowered to feel safe.”

An image of Stelo Labs' wallet extension firewall that lets crypto users know if their transaction is safe or not

Image Credits: Stelo Labs (opens in a new window)

Since September, it has protected thousands of wallets with a collective amount worth over $100 million, Scharfstein said.

The service runs the most popular signature types — or transaction agreements — through its engine to help determine whether a transaction is a low, moderate or high risk, and also provides context so people can understand what they’re signing, as opposed to telling them what to do, Dhesi said.

Today it’s releasing its developer API so independent dApps and wallets can use its Stelo Transaction Engine. It’s also launching a token approvals experience to help users understand their wallet’s “health score” and keep it safe by recommending revoking approvals to third parties, the co-founders said.

The capital will be used to expand the team and its product beyond a Google Chrome extension and “meeting users where they are,” Scharfstein said.

Over time, Stelo plans to develop an embedded version of its API and find a way to make the Ethereum transaction “human readable,” because there are many nuances at the moment, Dhesi said. “We don’t want every developer to reinvent the wheel, so we will package the Stelo user interface inside a library so they can just drop it in and make a customizable fit […] that’s something we’ll invest in over the next few months.”

In the long term, Stelo wants to build a user interface that puts every transaction through its service, whether that’s through a crypto wallet, consumer-facing extensions or another avenue, the co-founders said.

While the service is Ethereum-focused right now, Stelo wants to bring it to more Ethereum Virtual Machine (EVM)-compatible chains on board in the future, Scharfstein said. “We want to make sure every transaction goes through our risk extension.”

Stelo Labs raises $6M in a16z-led round to help crypto wallet users protect themselves by Jacquelyn Melinek originally published on TechCrunch

Source: New feed

2023-02-16T16:00:22+00:00
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